And Then There Were Two Featured

County faces renewed healthcare problems as insurance providers drop in Montgomery

The Maryland Health Connection, the state’s online health insurance market or “exchange” under former President Barack Obama’s Affordable Care Act, will have just two companies offering individual health coverage for 2018.

The two health insurance providers are: CareFirst BlueCross BlueShield, and Kaiser Permanente of the Mid-Atlantic States.

Much of Maryland will have only one choice, CareFirst, for individual health coverage next year. Kaiser’s service area in Maryland covers the D.C. suburbs and the Baltimore metro area –but not Western Maryland, the Eastern Shore or parts of Southern Maryland.

In May, when health insurers applied to the Maryland Insurance Administration for rate increases for the plans’ upcoming year, four firms sought to participate in the Maryland individual market next year. The other two companies were CIGNA, a major national health insurer, and Evergreen Health, a company operating only in Maryland that participated in the state’s exchange in 2016 but not 2017.

In June, the number of insurers in the running for providing health care under the ACA decreased to three when CIGNA dropped out, citing uncertainties in pricing as well as a small market share of Maryland exchange business.

On July 25, Maryland Insurance Commissioner Al Redmer Jr. ordered Evergreen Health not to renew its insurance policies or issue any new ones, according to a Maryland Insurance Administration (MIA) statement. Then on July 31, Redmer obtained a receivership order on Evergreen from Judge Yolanda Tanner of the state Circuit Court in Baltimore.

“Evergreen Health’s financial position and the failure of [a proposed] acquisition [by investors] to close necessitated the receivership,” MIA said in the statement.

Redmer’s two moves mean that Evergreen must complete its commitments on its remaining 25,000 non-health-exchange policies and then shut down, thus incapacitating it from participating in the 2018 health insurance market.

Scott Weier, senior communications director with Kaiser in Rockville, said, “We do not expect significant [market] impact from being one of only two plans statewide.”

“The majority of members in the individual market have been covered by the remaining two carriers, Kaiser and CareFirst, for the last few years,” Weier said.

CareFirst “declines to comment” on whether the drop to two sellers will have any market impact, Sarah Wolf, communications representative for the company, told the Sentinel.

Back in May, CareFirst was seeking approval from the MIA for exchange plan rate hikes on individual coverage, averaging a 50 percent increase over 2017 rates, for its health maintenance organization (HMO) products, and an average 59 percent increase for its preferred provider organization products. Kaiser seeks rate hikes of 18 percent for its HMO product.

Tracy Imm, public affairs director for the Maryland Insurance Administration, said the state’s decisions on the rates will come in mid-September, shortly before the companies must submit their 2018 plans and rates to the federal Department of Health and Human Services.

According to the MIA’s explanation of the proposed rate increases, CareFirst would charge a 40-yearold non-smoker, buying the lowest-cost Silver plan under the ACA in 2018, $715 per month for its PPO and $519 for its HMO, before tax or employer subsidies. Kaiser would charge the same patient $359 for its lowest-cost Silver HMO.

Kaiser’s price advantage is somewhat muted because health exchange subscribers with incomes below 250 percent of poverty levels receive federal tax credits that offset much of their monthly premiums. In addition, CareFirst data indicates it has a substantially larger share of the Maryland individual exchange market than Kaiser.

Maryland is not alone in reducing the number of between health insurance companies in the ACA individual market, according to numerous press reports. Many states have experienced reductions of consumer choice and competition in the ACA individual market over the last several years, especially this year. That market is experiencing further instability because of threats by the Trump Administration to cut off “cost-sharing reduction” or CSR payments.

On July 29 – the day after the Obamacare “repeal-and-replace” effort failed in the U.S. Senate – President Trump tweeted a threat to stop making CSR payments, terming them “bailouts” of insurance companies.

For lower-income exchange patients, mostly the same people who get tax credits to help pay for monthly health insurance premiums, the ACA mandates that providers such as doctors and hospitals give discounts on out-of-pocket expenses such as copays and deductibles. The ACA also directs that insurers refund the discounted amounts to providers, and in turn the ACA directs HHS to reimburse insurers for these refunds. The reimbursements are the CSR payments. Because the payments are simply pass-throughs for insurance companies to make up for discounts mandated by the ACA, insurers deny that they are “bailouts.”

While HHS is contractually required to make CSR payments to insurers, Congress has never appropriated money to do so. The Obama administration nevertheless made the payments, and so has the Trump administration, while threatening to discontinue them.

The matter is in litigation before the federal appellate court in D.C. On Aug. 1, that court allowed 16 states including Maryland to intervene in the case. Thus, even if the Trump administration abandons the case as part of an attempt to cut off the payments, the states can pursue the case to support continuing the payments.

Finally, the CSR payments and the strengths and weaknesses of the Obamacare exchanges are key issues in hearings scheduled for September by the Senate Health, Education, Labor and Pensions Committee.

The exchanges, both in Maryland and nationally, may well be in for a roller coaster ride of further threats and changes between now and 2018.



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